DeMarco Dissects Arguments for Principal Forgiveness

``DeMarco said there are many issues involved in the decision on whether the Enterprises should employ principal reduction but data on modifications on its loans show that performance is not strongly related to current LTV but is a function of the payment change. More complex analysis of other studies show some effect of LTV but not as strong as that of payment reductions'' -- Yeah and research showed that based on credit score, people wouldn't suddenly default in droves on their subprime and Alt-A loans, but they did...